A growing number of Chinese consumers are switching from Apple’s iPhone, paper says

Huawei is winning over more and more Apple fans in China as the escalated trade tensions stoked “nationalist sentiment,” according to the South China Morning Post.

China’s consumers are increasingly favoring their domestic brands after the U.S. stepped up its action against Huawei, the paper said. The article cited a few anecdotes where people switched to Huawei smartphones from their beloved iPhones to show their support for the country and Chinese brands.

“It’s kind of embarrassing to pull an iPhone out of your pocket nowadays when all the company executives use Huawei,” Sam Li, who works at a state-owned telecom company in Beijing, told South China Morning Post. He added his company offers employees a Huawei discount.

The nationalist rhetoric has gotten louder in China after President Donald Trump blacklisted Huawei, effectively halting its ability to buy American-made parts and components. Comments like “support Huawei” and “hang in there” have become increasingly popular on Chinese social media platforms and some people said Google’s decision to cut ties with Huawei is like “cutting the ground from under one’s foot,” according to the Hong Kong-based newspaper.

Apple, a big player in China, is sitting in the crossfire of the tit-for-tat tariffs between the U.S. and China. Its China business accounted for more than 17% of its sales in its fiscal second quarter and the company sells billions of dollar worth in iPhones in China every year.

Now the anti-Apple sentiment in China is creating more headaches for the tech giant who is already suffering from the slowing iPhone demand. Shares of Apple has tumbled nearly 12% in the past month as trade tensions intensified. The U.S. hiked tariffs on $200 billions worth of Chinese goods earlier in May. China retaliated by raising duties on $60 billion worth of U.S. imports to as high as 25%.

Goldman Sachs said Wednesday if Apple’s products were banned in mainland China, its earnings could drop by 29%.

The trade worries has prompted many Wall Street analysts to cut their projections for Apple. HSBC cut its price target on the tech giant to $174 per share from $180, while Credit Suisse also said Apple’s earnings per share would drop by about 15 cents a share for every 5% drop in Greater China sales

Source: https://www.cnbc.com/2019/05/23/a-growing-number-of-chinese-consumers-are-switching-from-apples-iphone-hong-kong-paper-says.html

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